Académique Documents
Professionnel Documents
Culture Documents
state law determines which possessions the debtor may keep; and a trustee sells the rest of the assets to pay as many of the debts as possible.
Remember - a corporation does not receive a discharge, so if a company starts up again after filing a Chapter 7 petition, even under another name, it will still be liable for its old debts. Individuals do receive a discharge but may have a significant amount of difficulty obtaining credit at reasonable interest rates after liquidation. Chapter 13: Wage Earner Plans Chapter 13 is available to small businesses operated by a sole proprietor or individuals with a regular income who owe less than $807,750 in secured debt (debt for which there is collateral, like a house) or less than $269,250 in unsecured debt. Wage earner plans give debtors the chance to continue operation and get back on their feet. With Chapter 13, debtors: do not give up their current assets and property to pay debts; agree to an established and monitored payment plan; and use their future income to pay creditors over time. Chapter 11: Reorganizations Chapter 11 is an alternative plan for individuals with debts too large for Chapter 13 or businesses not allowed to file under Chapter 13. This petition is used by individuals and businesses that want to retain control of their assets, which they try to reorganize or liquidate, rather than turning them over to a trustee. Chapter 11 is primarily used for reorganization. With Chapter 11: debtor provides the court with a reorganization plan with court approval, the business may be discharged from all of its pre-bankruptcy debts except for the debts to be paid under the reorganization plan creditors are often given the chance to vote on whether or not to accept the proposed plan; however, if the plan meets certain standards, the court may still approve it regardless of the creditors opinions. Office of the Illinois Attorney General www.ag.state.il.us Chicago (800) 386-5438 TTY: (800) 964-3013 Springfield (800) 243-0618 TTY: (877) 844-5461 Carbondale (800) 243-0607 TTY: (877) 675-9339
Printed by the authority of the state of Illinois. This material is available in alternate format upon request.